NARENDRA MEHTA HUF, MUMBAI V. ITO 16(1)(4), MUMBAI

ITA 3209/MUM/2013

• Counselvise Citation: 320919914 RSA 2013
• Duration Of Justice: 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 26-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ROOPAK KUMAR
• Assessee Lawyers: M SUBRAMANIAM
• Keywords: Corroborative evidences

Judgement Text

. , IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI , BEFORE SHRI R. K. GUPTA , JM ITA NO. 3209 / MUM/ 20 1 3 ( ASSESSMENT YEAR : 200 7 - 0 8 ) NARENDRA MEHTA HUF, 1403, GIRNAR BUILDING, 69, TARDEO ROAD, MUMBAI - 400 034 VS. ITO 16 ( 1 )( 4 ) , MUMBAI - 07 PAN/GIR NO. : A A AHN 0020 K ( APPELLANT ) .. ( RESPONDENT ) /ASSE SSEE BY : M. SU B RAMANIAM /REVENUE BY : SHRI ROOPAK KUMAR DATE OF HEARING : 21 ST AUGUST , 201 3 DATE OF PRONOUNCEMENT : 4 TH SEPTEMBER , 2013 O R D E R TH E ASSESSEE HAS PREFERRED THIS APPEAL AGAINST THE ORDER OF LEANED CIT(A) RELA TING TO THE ASSESSMENT YEAR 200 7 - 0 8 . 2 . THE ASSESSEE IS OBJECTING IN UPHOLDING THE DISALLOWANCE OF RS. 81,982/ - , OUT OF FOREIGN TRAVELLING EXPENSES INCURRED OF RS. 8,19,827/ - . THE ASSESSEE IS ALSO OBJECTING IN FURTHER DISALLOWING FOREIGN TRAVELLING EXPENSES AMOUNTING TO RS. 7,13,845/ - . IN THIS WAY, THE TOTAL FOREIGN EXPENSES HAS BEEN DISALLOWED BY THE LEARNED CIT(A) BY ENHANCING THE FOREIGN TRAVELLING EXPENSES. ITA NO. 3209 /20 1 3 2 3 . DURING THE ASSESSMENT PROCEED INGS, THE AO NOTICED THAT THE ASSESSEE HAS CLAIMED FOREIGN TRAVELLING EXPENSES OF RS. 8,19,827/ - . AS REQUIRED BY THE AO, THE ASSESSEE FILED DETAILS ALONG WITH LETTER DATED 7 - 12 - 2009 EXPLAINING THE PURPOSE OF FOREIGN TRAVELLING. THE AO NOTED THAT SUPPORTING DOCUMENTS WERE NOT PRODUCED; HENCE, THE ENTIRE EXPENSES WERE NOT FULLY VERIFIABLE. THEREFORE, HE DISALLOWED THE 10 % OF THE TOTAL EXPENSES. 4. THE ASSESSEE PREFERRED APPEAL B EFORE THE CIT(A) , WHO ALLOWED OPPORTUNITY TO EXPLAIN THE ASSESSEE AS TO WHY THE TOTAL EXPENSES CLAIMED ARE ALLOWABLE. SINCE NO SATISFACTORY REPLY WAS FILED ON BEHALF OF THE ASSESSEE, THEREFORE, LEARNED CIT(A) WAS OF THE VIEW THAT THE ENTIRE FOREIGN TRAVELLING EXPENSES ARE TO BE DISALLOWED. ACCORDINGLY, HE DISALLOWED THE ENTIRE FOREIG N TRAVELLING EXPENSES OF RS. 8,19,827/ - CLAIMED BY THE ASSESSEE IN ITS PROFIT AND LOSS ACCOUNT. 5 . AFTER CONSIDERING THE RIVAL SUBMISSIONS, I FIND THAT THE ASSESSEE DESERVES TO SUCCEED IN ITS APPEAL IN PART. I NOTED THAT WHEN THE ASSESSEE WAS ASKED TO PRO DUCE THE COMPLETE DETAILS ALONG WITH SUPPLEMENTARY DOCUMENTARY EVIDENCES, THE FOLLOWING REPLY WAS FILED : - WE ARE IN BUSINESS OF JEWELLERY AND DIAMONDS BOTH IN DOMESTIC MARKET AS WELL AS IN EXPORTS. DURING THE YEAR WITH A VIEW TO EXPANDING AND DIVERSIFYI NG THE BUSINESS THE ASSESSEE THOUGHT OF ENTERING EXPORT MARKET OF STUDDED GOLD JEWELLERY. MYSELF ALONG WITH EXPORT EXECUTIVE KRUPA THACKER VISITED USA TO EXPLORE THE POSSIBILITY OF THE EXPORT BUSINESS. I DEPARTED ON 27/04/2006 AND RETURNED ON 25/04/2006. T HE EXPENDITURE WAS INCURRED IN COURSE OF BUSINESS ONLY. THE PROPRIETOR HAS SPENT TICKET, HOTEL EXPENSES, CONFERENCE WITH CLIENTS. COPIES OF TICKETS AND PURCHASE OF EXCHANGE ARE ENCLOSED. ITA NO. 3209 /20 1 3 3 AFTER GOING THROUGH THE REPLY, IT IS SEEN THAT THE FOREIGN TRAVE LLING WAS DONE FOR THE PURPOSE OF BUSINESS ONLY. HOWEVER, CERTAIN EXPENSES WERE NOT SUPPORTED BY FURTHER EVIDENCE. THEREFORE, THE AO WAS OF THE VIEW THAT THE ENTIRE EXPENDITURE ARE NOT ALLOWABLE. HENCE, HE DISALLOWED 10% OF THE TOTAL EXPENSES. IN MY CONSID ERED VIEW, THE AO HAS TAKEN A REASONABLE VIEW AS THERE WAS NO DISPUTE THAT THE EXECUTIVES OF THE ASSESSEE WERE VISITED USA FOR THE PURPOSE OF BUSINESS ONLY. LEARNED CIT(A) HAS NOT ASSIGNED ANY VALID REASON AS TO WHY THE ENTIRE EXPENDITURE ARE DISALLOWABLE. IT HAPPENS SOMETIME THAT SUPPORTING EVIDENCES MAY NOT BE COLLECTED OR COULD NOT BE FILED, BUT IT CANNOT BE SAID THAT THERE WAS NO FOREIGN TRAVELLING. THIS IS NOT A CASE OF THE DEPARTMENT THAT FOREIGN TRAVELLING WAS FOR THE PURPOSE OF PLEASURE TRIP AND NOT FOR THE PURPOSE OF BUSINESS. THEREFORE, I AM OF THE VIEW THAT THE ENHANCEMENT MADE BY THE LEARNED CIT(A) WAS NOT JUSTIFIED. ACCORDINGLY, I DELETE THE ENHANCEMENT AND CONFIRMED THE ORDER OF THE AO. 6 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PAR T . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 4 TH DAY OF SEPT .2013 SD/ - ( ) ( R.K.GUPTA ) / JUDICIAL MEMBER MUMBAI ; DATED : 04 / 09 / 2013 /PKM , PS ITA NO. 3209 /20 1 3 4 COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RE SPONDENT. 3. / THE CIT(A) , MUMBAI. 4. / CIT 5. / DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// / BY ORDER, ( ASSTT. REGISTRAR) / ITAT, MUMBAI